Here's our summary of key economic events overnight that affect Australia with news its all about the 'debasement trade" today - Trump debasing US public policy resulting in a rush to gold, a jump in US Treasury yields, and a fall in the greenback. Equities and cryptos are falling.
In the US overnight, there was another good rise mortgage applications, largely on the back of a rush of refinance activity as 30 year mortgage rates eased.
However December data for pending home sales took an unusually large dip from November to be -3.0% lower than year ago levels.
In Canada, producer prices actually fell in December, unexpected because a small rise was anticipated. That puts them +4.9% higher than year ago levels, the slowest rise since August.
In Indonesia, they reviewed their policy rate overnight, leaving it at 4.75% as expected.
In Europe, the European Parliament has suspended the approval of a key US trade deal agreed in July in protest at Trump's demand to take over Greenland. Both Trump and some of his cabinet are at Davos, and in full arrogant insult mode.
In Australia, the Westpac–Melbourne Institute Leading Economic Index inched up 0.1% in December from November to +0.42%, following the no-change in the previous month. The recent uptick is led by commodities and an improved homebuilding outlook. But the December rise was less than expected. A year ago its was +0.25%, so nearly a doubling since that tame benchmark.
The OECD's latest review of the Australian economy paints a positive picture, noting our resilience to international shocks. But they want to see improving productivity growth and housing affordability to support our "high living standards".
We should perhaps also note that cocoa prices have fallen sharply today, back to US$4400/tonne and the same level as two years ago. You may recall they reached US$12,250/tonne in April 2024 at the height of its surge.
The UST 10yr yield is now just on 4.28%, unchanged from this time yesterday. The key 2-10 yield curve is now at +69 bps. Their 1-5 curve is now at +31 bps and the 3 mth-10yr curve is now at +60 bps. The China 10 year bond rate is unchanged at 1.82%. The Japanese 10 year bond yield is back down -5 bps at 2.30%. The Australian 10 year bond yield starts today at 4.76%, down -2 bps from yesterday.
Wall Street is in its Wednesday session with the S&P500 recovering +0.3% but the earlier much larger recovery gains (over +1%) seem to be fading. The S&P500 has fallen a net -1.8% in the past two days, so far. It's the same for the Nasdaq which is now back with a small loss today, down -2.2% for the same two days. Overnight European markets were mixed between Paris's tiny +0.1% rise and Frankfurt's -0.5% dip. Yesterday Tokyo closed down -0.4%. Hong Kong was up +0.4%. Shanghai was up a minor +0.1%. Singapore fell -0.4%. The ASX200 also fell -0.4%.
The price of gold will start today at US$4843/oz, and up another +US$93 from yesterday and a new record again. Silver is lower at US$93.50/oz and off its record high.
American oil prices are up a bit more than +50 USc from yesterday at just on US$60.50/bbl, while the international Brent price is unchanged at just under US$65/bbl.
The Australian dollar is up +40 bps from yesterday, now at just under 67.7 USc. Against the Japanese yen we are up +50 bps at ¥107. Against the euro we are up +40 bps at just on 57.8 euro cents.
The bitcoin price starts today at US$87,927 and down -2.0% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.4%. And we perhaps should note that the $TRUMP memecoin has plunged more than -90% from its peak a year ago, burning its adherents bigtime.
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